Devising strategies for a new outsourcing paradigm

The elimination of barriers between economies that initially triggered offshoring of core and non-core jobs to low-cost destinations has since led to the growth of flourishing outsourcing sectors in supplier jurisdictions. The outsourcing industry, now in its second stage, is both prompting and requiring the development of a new paradigm and rules of functioning that accurately reflect the emerging competitive environment.

Several factors – economic recession, changes in the kinds of work being outsourced, stipulations regarding confidentiality and an emphasis on sound business practices – are influencing change in the business strategies of outsourcing clients as well as vendors.

The recession has been the major driver of strategy building for outsourcing clients recently. The pressures of economic slowdown have compelled companies not only to cut costs, but also to retain profit margins in the quest for survival. This has led to a change in the way they perceive outsourcing opportunities in low-tariff destinations. Clients are now shopping around for a supplier that best meets their requirements in terms of optimum operational and cost benefits.

Dr Sushil Kumar is the vice-president at Clairvolex Knowledge Processes, a Delhi-based legal outsourcing firm.